Lecture #9: Entrepreneurship and Small Business Management
March 25, 2014
Entrepreneurship - strategic thinking and risk-taking behaviour that results in the creation of
new opportunities for individuals and/or organizations.
Entrepreneurs - risk-taking individuals who take actions to pursue opportunities and situations
others may fail to recognize or may view as problems or threats.
Typical Characteristics of Entrepreneurs:
Internal locus of control.
High energy level.
High need for achievement.
Tolerance for ambiguity.
Passion and action-orientation.
Self-reliance and desire for independence.
Entrepreneurship can be a function of self-efficacy; self-efficacy = competence; locus of
control: contingence; personal agency belief [Entrepreneurship is a multiplicative
function (self-efficacy * locus of control)].
Typical Entrepreneurial Backgrounds and Experiences:
Parents were entrepreneurs or self-employed.
Families encouraged responsibility, initiative, and independence.
Have tried more than one business venture.
Have relevant personal or career experience.
Become entrepreneurs between 22 and 45 years of age.
Have strong interests in creative production and enterprise control.
Seek independence and sense of mastery.
Common Myths about Entrepreneurs:
Entrepreneurs are born, not made.
Entrepreneurs are gamblers. Lecture #9: Entrepreneurship and Small Business Management
March 25, 2014
Money is the key to entrepreneurial success.
You have to be young to be an entrepreneur.
You must have a degree in business to be an entrepreneur.
Characteristics of Small Businesses:
Ones with 100 or fewer employees.
Independently owned and operated.
50% of the private labour force works in small businesses.
Are established by: starting a new business, buying an existing business, buying and
running a franchise.
Entrepreneurship and the Internet.
International business entrepreneurship.
Reasons for small business failures.
Important Issues in New Venture Creation:
Does the entrepreneur have good ideas and the courage to give them a chance?
Is the entrepreneur prepared to meet and master the test of strategy and competitive
Can the entrepreneur ident